What Trump should do now that Andy Puzder withdrew his nomination for Secretary of Labor–Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From Fortune

Now that President Trump’s pick for Secretary of Labor, CKE Restaurants CEO Andy Puzder, has withdrawn his nomination for U.S. Secretary of Labor, America will avoid, at least for the moment, a highly divisive debate over the future of U.S. employment and labor policy. This gives President Trump an opportunity to reconsider the type of person he wants to carry out his agenda.

Will Trump choose someone who respects the mission of the Labor Department, which is: “To foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.”

Or, will he choose another candidate who will implement an agenda that weakens employment standards and enforcement; thwart efforts of women and men who are organizing to support low-wage workers, and deepen the divide between business and labor? If this is the direction of whoever gets confirmed Secretary of Labor, we will be revisiting last century’s labor battles and further divide the nation.

This will not serve the country or the Trump Administration well. The U.S. needs to replace the debates of the past with a more positive, forward looking vision and strategy for labor and employment policy. Today, more than ever, the nation needs a policy, and policy leaders, that unite workers, unions, employers, and government around actions capable of building an economy that works for all and that heals the wounds laid bare in the election.

I call this a high-road strategy because it builds on what many firms, unions, and workers are already doing to achieve good long-term profits and support good paying and fulfilling jobs and careers. It is based on a simple premise, supported by years of research and evidence from multiple industries: Firms have choices in how to compete; they can pursue profits by following what we call a “low-road” strategy of minimizing wages, tightly controlling workers, and resisting any form of worker organizing. For years, Walmart has been this prototypical firm. Or they can follow a “high road” strategy of investing in employees and empowering them to help improve operations and use advanced technologies to achieve high levels of productivity and customer service that will generate both good long-term profits and support good wages and careers.

In retail, Costco has been cited as such a firm that competes successfully with Walmart. In airlines, Southwest Airlines is the favorite example of a firm that achieves high profits, high customer service/satisfaction ratings, and is constantly voted one of the best place to work.

Employment and labor policy should focus on increasing the number of high-road firms and jobs and vigorously enforcing the nation’s laws and regulations to assure compliance and encourage gradual upgrading of working conditions in low road firms.

Business leaders who have built or want to build high-road firms have the most to benefit from a policy that supports the spread of high road firms and in fact would be hurt by efforts to weaken regulations or labor standards covering their low road competitors.

Read the full post at Fortune.

Thomas Kochan is the George Maverick Bunker Professor of Management, a Professor of Work and Employment Research, and the CoDirector of the MIT Sloan Institute for Work and Employment Research at the MIT Sloan School of Management. 

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